Transforming growth factor β (TGF-β) is a potent antiproliferative factor in multiple types of cells. Deregulation of TGF-β signaling is associated with the development of many cancers, including leukemia, though the molecular mechanisms are largely unclear. Here, we show that Casitas B-lineage lymphoma (c-Cbl), a known proto-oncogene encoding an ubiquitin E3 ligase, promotes TGF-β signaling by neddylating and stabilizing the type II receptor (TβRII). Knockout of c-Cbl decreases the TβRII protein level and desensitizes hematopoietic stem or progenitor cells to TGF-β stimulation, while c-Cbl overexpression stabilizes TβRII and sensitizes leukemia cells to TGF-β. c-Cbl conjugates neural precursor cell-expressed, developmentally downregulated 8 (NEDD8), a ubiquitin-like protein, to TβRII at Lys556 and Lys567. Neddylation of TβRII promotes its endocytosis to EEA1-positive early endosomes while preventing its endocytosis to caveolin-positive compartments, therefore inhibiting TβRII ubiquitination and degradation. We have also identified a neddylation-activity-defective c-Cbl mutation from leukemia patients, implying a link between aberrant TβRII neddylation and leukemia development.